DAWODU.COM

Dedicated to Nigeria's History, Socio-Economic and Political issues

How To Develop Our
Economy

By

Basil Enwegbara

culled from THISDAY,
June 19, 2005

The West was taken
unaware. They couldn’t see it coming. That Chinese and Indian once believed to
be peripheral economies could within a twinkle of an eye beat the entire western
economies in their own game remains the greatest shock. So shocking it is not
because they played well in this unfamiliar territory. More shocking is how
they have disarmed the west, who, now have to follow the dictates of these two
growing economic superpowers. Making recovery from the shock of their lives more
difficult, China has gone further to defy the once strongly held western
conviction that capitalism must always go hand in hand with democracy. In fact,
China proves the Singaporean elder statesman, Lee Kuan Yen, right, who preached
to every Asian country he visited in the early 1990s, to always: “Restore law
and order, build more infrastructure, and concentrate on economics, not
democracy.”
But how could these two countries outsmart the west in their own game overnight?
What is it that China and India have done that is impossible in Africa? Could it
be their immense populations, a large army of well-trained cheap workforce? Or
could it be their ability to fully harness their critical human capital stock?
Could one attribute their successes to their ability to build a vibrant
entrepreneurial class? Could the answer be found in their second-to-none social
contracts, highly inclusive social contracts? What about attributing their
success stories to powerful and globally well-networked Diaspora Chinese and
Indians, who today yield enormous economic and intellectual power around the
world? Or could it be as Chika Onyeani, puts it in his book Nigger
Capitalism—that “the miracle is as a result of these t o countries’ spider web
doctrine,” an impenetrable social and economic networks?
To understand that there is nothing magical these two countries have done, all
we need to do is to scan through the history books of economic development. We
will be amazed to discover that what they repeated was what was a known
industrialisation process, first started by Britain when it led the first
industrial revolution, later spread around Europe, and used by America to beat
the industrial economies Europe hands-down starting from 1880. What these two
countries really have done recently is mobilising their first eleven economic
team, who, in letting loose the engine of economic growth, have mastered how to
fully exploit large local market advantages. Mobilising their entrepreneurs to
act stubbornly like the earlier American entrepreneurs such as Carnegie,
Rockefeller, Ford, Gould, and Morgan, acted, and recognising their vibrant local
populations as both sources of production and consumption wouldn’t have, after
all, put them behind today’s aging western economies.
Put simply, the Chinese and the Indians are today achieving an unprecedented
economic growth thanks to a process that organically involves many of the
interrelated factors, from huge markets to well educated cheap workforce to
increase in inflow of foreign investments. If it was a huge market incentive
that drew unprecedented 19th century European investors to America, it is the
same that is happening in twenty-first century in China and India. If it was
all about taking full advantage of scale economies available in
twentieth-century American manufacturing, distribution, marketing, and research
processes, Chinese and Indians are doing the same today.
In the meantime, understanding that having a large population is not enough, led
them to figure out that it is only a socially and economically engaged
population, a population with income-producing capacity that can move their
economies to the height of middle class. So, what they have learned from the
past American experience is that a large and affluent population, enjoying
increasingly higher household income distribution, is critical to enlarging and
standardising local markets. Another is their cleverness in recognising the fact
that dynamism in a natural economy is strongly correlated to entrepreneurialism,
and that the buoyancy of small and medium size sector in terms of a high-birth
rate is equally responsible for innovativeness and growth in employment. There
is another important historical lesson that never slips their minds. That is
that rather than spend scarce national revenues on building world-class white
elephant infrastructure, infrastructure that can hardly sustain corresponding
capacity utilisation and growth, these two emerging global economic superpowers,
easily figured out that scarce public money is better focused on critical
infrastructure that can encourage and expand private initiatives.
Just like earlier Americans, today’s Chinese and Indians are fully aware that
for them to be able to build new wealth they too must imitate what others
already invented. That is, they fully recognise they don’t need to invent the
mousetrap for it has already been invented long time ago, but rather, all they
have to smartly figure out is the best ways to resend the mousetrap to the
market to beat those already in the market. It is this little steps taken that
have given the Chinese and the Indians the enormous advantage of smartly
exploiting the power of their small-firms sector. And the buoyancy of this
highly flexible and innovative sector it is that has given rise to an
unprecedented economic growth. It is this small-firms sector that now drives
their competitiveness, their high rate of employment.
Following the same American footsteps, these two emerging economic superpowers
are equally aware that low-tech could not take them too far in the game of
economic competition, particularly when it comes to high-value based growth.
Cognisance of the potential landmine ahead, broadening their scientific and
technological human capital base has turned out to be creating more surprises to
the west. To this end, their local universities are now turning out the largest
and the best PhDs in science and engineering in the world. This, they want to
sustain by their recent embankment on building what are going to become the
world’s largest and most sophisticated human knowledge factories.
Their boys and girls are today beating their American and European
counterparts in their own territories. Particularly in the US, Chinese and
Indian students have, without raising any public alarm, taken over some of
America’s best engineering and science schools. At MIT, Stanford, and Caltech,
for example, Chinese and Indian students now outnumber and outclass their
American hosts. But it hardly ends there. Rather than head home upon getting
their newly minted first-class PhDs in science and engineering, these young
scientists, heading to America’s exclusive research shrines, now outnumber
Americans at such strategic scientific research centres like the MIT Lincoln
Lab and NASA’s Jet Propulsion Lab in Pasadena California, once reserved only
for America’s best and the brightest weaponry and space science and engineering
researchers. When taking an American citizenship is all that is needed to lower
public suspicion, they have never hesitated go for it. Little wonder these two
countries can boast of possessing nuclear weapons, thanks to the efforts of
their Diaspora scientists in America, who work closely with their homeland
counterparts. They have succeeded like “generals, who, having carefully laid
their planned assault, now shoot down their enemies one by one.”
But let me also be fair here. What the Chinese and the Indians are doing is not
unheard of because in no known human history, has there been a country or a
civilization that achieved greatness based on moral purity. Take the British
for example. In its quest to lead the world’s first industrial revolution, not
only did it copy whatever it could and wherever it could be found. The British
were equally notorious as high sea pirates stealing what they could steal from
others as if those were their birthrights. And one way or another, the American
industrial economic was built thanks to slave labour. What about the European
colonizers, who returned to Africa in the nineteenth century after centuries of
participation in the human trafficking of Africans, this time, to violently
occupy the whole continent and divide it as their commercial interests dictated?
Is there any closeness to what the Chinese and the Indians are doing today to
the European human cruelty?
Can Africans learn something from today’s Chinese and Indians? Can we learn that
a strong market for goods and services is a leading cause of economic growth,
and that market is itself a major cause of capital, investment, and
technological advancement? Are we now convinced that economic growth is an
organic process, involving many interrelated factors? What about understanding
that even the banking industry and other financial institutions do not create
the conditions for economic growth, since they are only important when an
economy is sufficiently sophisticated to make efficient and creative
intermediation between savings and business?
Have we now finally realised that a continent that does not educate majority of
its young men and women in job-enhancing education (science and engineering) to
prepare them as useful citizens is not building its future high-value carrying
workforce? Are we still in doubt that Africa having the world’s single largest
number of highly educated professionals in the US and yet they could not be
made to work closely with their African counterparts—like their Chinese and the
Indians counterparts—to help jumpstart continental economy is our collective sin
future generations will find difficult to forgive us? Have we now come to pose
the question: How come our well-trained scientists and engineers, those that
refused to migrate are allowed to roam our streets without being fully mobilise?
What about the understanding that the future of our economic development lies in
the mobilisation of Africa’s entrepreneurs, especially our highly gifted men and
women who have the psyche of economic warriors? Put differently, are we now
fully aware that it is this lack of entrepreneurial dynamism that today
separates us from the developed economies of the West and recently Asian
economies?
What about our being convinced that it is not about reinventing the mousetrap,
since it has already built, but rather than go through the trouble of designing
and constructing a new mousetrap, we should focus on imitating what is already
out there in a way that beats these others in the market? Can we now concur
that to accelerate our economic engine, we must have some citizens willing and
eager to lead every level of the process, and others willing to prefer locally
made goods, like the Chinese and Indians? That otherwise we continue to create
jobs and build new wealth for other countries from where we import finished
goods?
What we ought to have learned from the Chinese and the Indian economic
‘miracles’ is that the solutions to our economic problems must be home-grown,
driven by a large number of our intellectuals. Lamenting on the dearth of the
intellectuals in our midst, one of Africa’s celebrated social theorists, Rev.
Dr. Matthew Kukah, asks the question: “How do we expect this ‘pickup van’ fully
loaded with more than a thousand tones of cement to move forward with such a
heavy load? The message Kukah is sending is clear; that bringing home our gifted
intellectuals, currently in exile should be vigorously pursued. That, it is now
paramount to bring home these specially gifted Diaspora Africans because not
only are they more familiar with the terrains of economic development but also
have the clout and the secrets
•
Enwegbara writes from Abuja